Process-based management

Process-based management is a management approach that views a business as a collection of processes. The processes are managed and improved by decisions and actions an organisation has taken in purpose of achieving a vision, mission and values of the organisation. A clear correlation between processes and a vision supports a company to choose strategic plans, structure and sufficient resources required to achieve success and goals.

From a process perspective, an organisation regards its business as a system of vision-achieving vertical processes rather than specific activities and tasks of individual functions. (19:25) It is not a method or tool that is improve processes, but a holistic approach to tie all the processes in the organisation. Therefore, to manage the processes in one of effectiveness, it requires an effective team network and full knowledge of the vision.

The general management system focuses on specific work-knowledge and direct solutions for cost and budget; on the other hand, a process based management applies these performance measures but in operational way considering how each performance affect the company as an amalgam of different processes. As a result of recent advances in technology and increased international competition, many organisations aims for better methods of grouping and integrating organisational activities.

To continue the advantages of process based management, the organisation is essential to analyse the process performances and improve the activities by data and report. Implementing the improvements, the organisation fulfills its vision and success it expected to obtain.

Vision, Mission and Values

vision, mission and core value are three crucial factors to manage an organisation from a process perspective. Considering vision, mission and value as a direction of their business, the organisation builds corporate strategy and determines which processes they take into account. As a result, the organisation can obtain strengths and competitiveness among other companies.

First, the vision is an aspirational purpose what the organization would like to achieve in the long run. The vision leads the company to challenge and develop its own business strategy. In other words, the organisation considers the vision as motivation to build a business structure, determine strategic plans and manage human resources. Therefore, the company carries out its operation to achieve their primary goals.

Mission is a core purpose of an organisation that remains unchanged over time. The mission provides a path and guides decision making that helps a company to reach the goals. It is different from a vision in that the mission is something to be achieved whereas a vision is something to be aimed for achievement.

Core Values is a principle that helps companies to determine whether the actions and decisions are right or wrong. The value enables companies to fulfil their business goals and contributes to the firm’s long-term success.

Advantages of process-based management

• Documenting a process provides a clear guideline for how organization improves their processes and performance over time.

• Process based management measures the full set of activities in a business. For instance, it focuses on the internal processes such as customer satisfaction, quality of product and security as well as financial results including revenues, profits, costs, and budget

• Understanding of their business processes and correlations avoids taking wrong decisions. It reduces costs, time and resources wasting on unnecessary things.

• Analysing the processes, organisation predicts sources of hazard and choose the appropriate decisions.

• The system protects intellectual capital of the organization. It monitors development of processes and analyse risks and its weakness.

• Focusing on continuous improvement and customer’s requirements, the organisation improves customer services which deliver value to its customers.

• Implementation of the business processes assures results the company expecting to obtain.

• The system is an integration of both input and output of each processes, therefore, it controls personnel, technical and financial resources in a holistic viewpoint.

• The organization can improve IT system to reduces unnecessary complexity and to improve the quality of performance measurement.

• Analysing processes and implementing new objects if required, the organisation deal with fast changes in demand.

Three stages in process-based management

Documenting the process

To provide its management system with a process based approach, the organisation needs to know what defines the process and what activities they consist of.

Processes are determined by information indicating the current state of company and some research data such as satisfaction of customers. For example, it includes departmental documentation, customer-based agreements, purchasing manuals and process flow charts. (tutorialspoint) Importantly, all processes must be clearly identified and documented when applied to yield and clarify.

Additionally, process based management is required to be processed in an operational way, therefore the people or departments have responsibility and ownership for each constituent part of the process.

The decisions and actions are taken to achieve a vision.

Analysing process performance

Considering the sequence of the processes, the organisation must be concerned with monitoring and measurement to find out the results against pre-determined objectives.

To monitor and improve the overall stage of process, the organisation establishes measures to evaluate the process. The measures are quantifiable metrics, comparative data and relevant benchmarks in order to obtain for relevant analysis. Consequently, process performance is possible to be monitored and improved upon the effectiveness and quality.

Utilising the relevant measurement, the organisation is capable of visualising the result with graphical representations, bar charts, pie charts, cause-and-effect analysis, and gap analysis. Those various tools specify the cand analyze the process performance and help the business to analyze the current state of performance.

Standardization of process, high dependence on data accuracy and continuous quest for sustainable improvements are crucial factors of analyzing the process-based management system.

Planning and implementation of Improvements

Process improvement is to improve and develop the process based on monitoring and measurement. It analyses how each process influences integration of quality and environment and sets new goals depending on the company’s strategic plans.

In order to achieve the vision of the organisation, its mission statement and its culture, the management system should deliver sufficient resources and commitment from the management team. Consequently, these efforts maintain and improve system effectiveness.

See also

• Project Management
• Value-based Management

References

• Shafer, S.M., Meredith, J.R. Operations Management: A process approach with spreadsheets. USA: John Wilry & Sons, Inc., 1998.
• Viio, P., Groenroos, C. Industrial Marketing Management. Value-based sales process adaption in business relationship, 2014; 43(6): 1-42
• Transition Support. Process based management systems[online]. UK: TransitionSupport, 2013. [Accessed 19 October 2014] Available from: http://www.transition-support.com/Process_based_management_systems.htm